Executive summaryThe internship activity is carried out the approval at parson nutritional Pvt Ltd, Harohalli industrial area in kanakapura for time period of 10 week from 15th January 2018 to 24th March 2018.
The main focus of the study is to performance evaluation of cost sheet.From the study it’s clear that cost sheet have achieved the best when it’s comes to growth evaluation of the top company in the category food product manufacturers, also known for trading companies and much more. Manufacturer of the herbal healthy table, herbal healthy energy drinks powders, healthy wheat biscuits, ayurvedic immunity booster and chocolates etc…The study shows there are number of customer friendly policies which are adding to the growth of products. CHAPTER 1INTRODUCTIONThe internship activity is carried out the approval at Parson Nutritional Pvt Ltd, Harohalli industrial area in kanakapura for time period of 10 week from 15th January 2018 to 24th March 2018. It was given opportunity to learn the world of cost accounting, cost management, and have a clear idea of the new business environment. It does also understand as to how cost management can assist the business in the application of the new management techniques.
It would also provide an insight into the cost management tools. The first part of the sentence speaks of cost as the objective or the end product which finally results from a process of costing and the second part as the process itself i.e. the ascertainment of cost. It would also provide an insight into the cost management tool to carry a study on costing.
INDUSTRY PROFILEBiscuit industry is one of the major food and beverage industry under FMCG industry. It is growing at a rapid rate in developing countries.OVERVIEW THE INDIAN BUSCUIT INDUSTRYBiscuit industrys contribute Rs 9,000 crores to the FMCG industry and provide a broad opportunity for growth, as the per capital consumption of biscuits is less than 2.5 kg 4kg in our country. India It is classifieds under 2 sectors: Organized and unorganized. Branded /Organized to Unbranded/Unorganized market share of biscuit has been 80% for organized sector and 40% for unorganized sector.
Apart from Big 3 (Britannia, Parle, ITC) there are around 160 medium to small biscuit factories in India. The Industry is now facing problem from increase of raw material price. With Government VAT up to 13.5% has added to their woes .
Biscuit consumption per capita in India has grown to 2.5kg per capita in comparison to 10kg per capita consumption in USA, UK and Europe. India Biscuits Industry came into limelight and started gaining a sound status in the bakery industry in the later part of 20th century when the urbanized society called for readymade food products at a tenable cost. Biscuits were assumed as sick-man’s diet in earlier days. Now, it has become one of the most loved fast food products for every age group. Biscuits are easy to carry, tasty to eat, cholesterol free and reasonable at cost.
States that have the larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the maximum amount of consumption of biscuits Even, the rural sector consumes.Biscuit industry is one of the major beverages and food industry under FMCG industry.
It is developing at fast rate in creating nations In the organized division the biscuit business conveys roughly 59% of the aggregate assembling, the staying 41% being supply through the unorganized bakeries. The enterprise includes 2 huge scale producers, around 50 medium scale units and 2500 small scale units running in the nation, as at 2014-2015. The disorderly zone is imagined to have roughly 30000 small and little bakeries through the India.
The composed zone of the biscuit makers yearly turnover (as at 2015-2016) is Rs. 12350 crores. Regarding organized division biscuit producing in 2014-2015 is expanded to 3.90 million tons. In the SSI district, the Biscuit undertaking which move toward becoming until the point when at that point held, wind up noticeably saved in 1997-98, as per the administration strategy, fundamentally underpins on the Abid Husain Committee rules.The yearly manufacture changed into around 12.
4 Lakh tons in 2007-2008 in the consequent 5 years, biscuit production generation saw a yearly development of 10% to 12%, up to 2009-10. In 2011-12 production expanded insignificantly by 2.75% when 2012-13 the development is around 3%. Nutritious snacks food are bundled as to health cognizant in the biscuit industry to be had at unimaginably forceful charges, volumes and unprecedented flavors.
In step with the NCAER examine, biscuit is predominately extraordinary by people from the lessening level of society, for the most part kids in each rural and metropolitan area with a standard month-to-month benefits of Rs. 850.00 Biscuit can be broadly categorized into the following segments: (Based on production of 2015-2016) Products Percentage (%)Glucose 65%Marie 14%Cream 13%Crackers 14%Milk 15%Others 09%In recognition of industry’s obligations towards the community, being a section of it, biscuit makers provide biscuits to the welfare agencies all told States for the good thing about college youngsters, senior voters and alternative poverty-stricken sections of the society.
Our business has conjointly participated in activity biscuits to the individuals of war ravaged Asian nation and presently to the Iraqi individuals, below the aegis of the international organisation.As regards the consumption pattern is concerned surveys and estimates by industry from time to time indicate the average consumption scenario in the four zones. These are the follows: Zones Average ConsumptionNorth States 29%South States 26%West States 25%East States 25%Biscuit may be a relatively low margin nutrient within the PMCG (Packaged Mass Consumption Goods) sector. The goods is additionally value sensitive, as a consequence of that, even once the Excise Duty was doubled on biscuits in 2000-01 biscuit makers, as well as the main brands, weren’t ready hike MRPs to the extend of the steep increase within the Duty. Taxation, each Central Excise Duty as conjointly State excise, alternative miscellaneous levies i.e.
Turnover tax, native space tax, purchase tax, octroietc, has been a significant deterrent within the growth of the biscuit trade. Besides lack of technology up gradation in producing, packaging etc has additionally been an element moving our trade, together with inadequate monetary credit and support significantly for the medium and tiny scale biscuit units. On the opposite hand, the govt of india has known food process industries as a priority space to be inspired for growth and development and created the Ministry of Food process Industries (which was until then a Dept. within the Ministry of Agriculture), headed by associate degree Ministry of State with independent charge.
The Food process Ministry has been rendering yeomen service to the trade, of which biscuit manufacturing is a crucial half. The Ministry, with the target of enabling food process Industries to undertake technology up gradation diversification. Growth as additionally to line up new units has developed theme of Grants and monetary help.Biscuit manufacturing still as alternative store product like Bread etc.
area unit agro based mostly industries, with the key inputs – wheat flour/Atta sugar, milk vanaspati/vegetable oil etc all being agriculture produces. Industries similar to Biscuit also are languishing as they’re not capable to attain their potentials for higher production, within the absence of the concrete food process trade Policy. The Food process trade Policy, that has been evolved as results of numerous workshops, deliberations and representations by an oversized cross section of food process industries, is nevertheless to be finalized.Biscuit production:According to the production data of providers presented up to the calendar year 2016, the entire production turned into 18,85,000 tonnes as against 1675,500 tonnes inside the preceding year.The manufacturing of biscuits for the remaining 10 years is as below.Year Production (in Rs.
)2007 9,75,4582008 10,88,4262009 11,20,4852010 11,85,0002011 12,60,0002012 13,50,0002013 13,85,0002014 14,56,0002015 16,75,0002016 18,85,000 ORGANIZATION PROFILE AND RESPONDENTS PARSONS NUTRITIONALS Pvt. Ltd.ABOUT PARSONS:Parson Nutritional Pvt Ltd. is a biscuit producing unit with the state of fine art and business benchmarking facility with set up capacity of 25000MT/year.
Presently this firm is occupied with assembling of 140000MT/year biscuit for GlaxoSmithKline customer health care Ltd.Parsons organization produces solid and great tasty biscuit i.e.
, Horlicks biscuits, Oats, (Animal formed) in 20SKU`s changing from 35gm to 500gm of every stand-out releases. The unit is ISO 9001-2000 guaranteed and reviewed with the guide of GSK`s essential extraordinary group. Our relationship with GlaxoSmithKline is 20years old, which talks about our good and translucent working.Parsons Nutritionals Pvt Ltd. is a registered under the companies act, 1956 by the enroll of companies, NCT, Delhi wide registration no.
U65311DL2002PTC115025 incorporated on 18th April, 2002. The firm advanced by Mr. Raj Deep Mann, Mr.Swapan Deep Mann and Mr.
Surinder Singh as promoters. Under contract producing the organization was elevated to set up committed biscuit producing unit for GSKCHL. The company has been manufactured biscuit under the brands names of Horlicks and Boost for GSKCHL the organization has been produced the biscuits.The Parsons Company supplies the biscuits all through the India and other adjoining nations like Nepal, Bangladesh, and SriLanka and Middle East as it contract producing unit for GSKCHL. The organization were seeing the past patterns most noteworthy Quality Management System (QMS) and Good Manufacturing Practices (GMP).In 2012 another unit began in Bangalore for supply of southern states.
Exhibit organization having committed creation of biscuits and Oats for manufacturing M/s GlaxoSmithKlineConsumer Healthcare Limited. In 2012 another milestone of the company had a concurrence with M/s Kraft food for manufacturing of biscuits under contract producing the Project is in starting stage.NATURE OF BUSINESS CARRIED:Parsons nutritionals private limited is manufacturing ofHorlicks Biscuits Cadbury Gems Horlicks Oats Oreo Biscuits Dairy Milk Lickables TYPES OF EMPLOYEES:SL.NO Particulars Numbers1. Permanent Employees 1602.
Contractual/outsource Employees 450Total 610Ratio Gender Wise Employment:SI.NO Gender Percentage (%)1. Female 2%2. Male 98%OWNERSHIP PATTERN: The Parsons Nutritionals Private Limited Company is a private limited company.
Parsons Nutritional Private ltd Company have a 100% ownership. FACT SHEET:Company: Year of 2012Incorporation Location of the Unit Plot No. 319-C, 320 A&B, 321, 2nd phase, Harohalli industrialarea, HarohalliKanakapuraTaluk, Ramanagara District,Pin: 562112PROMOTERS: Promoted by:Mr. S.S.
Mann, (NDRI Graduate, year 1971)Raj Deep Mann,(M.tech RMIT University, Melbourne, Australia- Joined business in Feb2000)Swadandeep Mann ( Bachelor of Engineering from Thapars, Patiala, MBA from Oxford University, U.K)Surinder Singh- (Mechanical Engineer) with the group Since 1989, currently as Executive Director Responsible for all technical and project activities.MISSION: “To hope the efficiencies for making certain consistent quality and customised answer that exceeds the requirements and expectations of the purchasers.”VISION:”To become one in all the world’s leading organizations in contract producing phase by following international best practices, strategic operation management and fast business growth.
“QUALITY: Quality is that the key driver of business at Parsons. the corporate has made public a well-defined quality management system to be followed at each stage. A demanding check on incoming raw, in-process management and final review ensures unflawed execution of all orders. The dedicated team of quality auditors at the corporate will redefine internal control program as per the necessity of the industry. Continuous quality improvement drives Parsons Goal to satisfy the customer’s wants for compliance.
QUALITY POLICY:Quality policy for Parsons Nutritionals Pvt Ltd.Deliver the product and services to our customers systematically through each internal and external like, that completely meet their goals in phrases of safety, performance, and quality. To fulfill its goals initial time, on time and whenever.
To undertake quality as a priority altogether our business method. Encourage continual improvement in effective functioning of the standard management system and to quality as a collective responsibility to get the peace of mind of all workers within the organisation. PRODUCT OR SERVICES: Manufacture of biscuits and Oats and food products.
Dairy Milk Lickables:Horlicks biscuits:Cadbury Oreo:Cadbury Gems: Horlicks Oats:38100011430 THE PROCEDURE OF BISCUIT PRODUCING INCLUDES THE FOLLOWING STAGES:MIXING:This is a procedure where all ingredients unit of measurement place along in right extent for dough formation. These ingredients unit of measurement then fed into Mixers wherever combination is completed and dough is concerning up for moulding/cutting. Major ingredients unit flour, fat, sugar et al. according to the item one may have to possess.MOULDING:In this space we have a tendency to laminate the dough into sheet, that at that time goes all the way down to gauge rollers, and sheet thickness is accomplished for moulder/cutter.
Here we’ve got a cutter or molder in step with the variability wherever one gets the form and sizes of biscuits.BAKING:This is the zone wherever we have a tendency to pass these moulded wet biscuit into baking kitchen appliance. The biscuit area unit baked on desired temperatures. totally different styles of heating area unit accessible currently every day in step with the comfort and value.
Distinctive kind ovens area unit on the market.PACKING:When biscuits discharge from the kitchen appliance finish the same biscuit is coming back for packing table through conveyor same are packed in distinctive packing machines in sight of the gram age.AREAS OF OPERATION: South India as well as export to Nepal SriLanka Arab countries COMPETITORS INFORMATION: All biscuit manufactures like i. Paramount nutritionals private ltd. ii.
Parle-G iii. ITC iv. Sun feast v. Britannia INFRASTRUCTURE FACILITY:Pneumatic Convey the System for Wheat Flour and SugarOnline Sugar PulverizeAutomatic Batching and Dispensing System for Wheat Flour and SugarMixer, Automatically Dough FeedersRotary Molding MachineNatural Gas Fired OvenCooling ConveyorMetal DetectorStacker & Packing TableHigh Speed Flow Wrap machines for Slug lessFamily Pack and Canteen Pack MachinePlant for Process and Drinking WaterOther Allied Service equipment like Generators, Compressors etc.SWOT ANALYSIS:STRENGTH:Services: The strength of the company is that it provide national and multinational companies with manufacturing and packaging services at par with best in the industries.
It provides services for sweeping range of products including food items, biscuits, oats, cereals products and many more.Parsons Nutritionals adopted environmental management and occupational health and safety management at par with international best policiesWEAKNESS:Attrition rate is highTransportation problemConnectivity problem (communication problem, signals, internet) OPPURTUNITIES:Has a good brand name and a very good market shareAttracting food manufacturing MNC because it has very good quality standards.THREATS:Problem of localities because of isolate place.FUTURE GROWTH AND PROSPECTS:Plan to have more MNC for manufacturing all kind of food products.To hold on the business of producing, processing, packing, packaging, refilling, blotting of all types food and food product, milk product, food stuff, provisions and client product.To manufacture, produced, process, prepares obtain, marketing and dealing in soymilk, soya milk product and preparations, leguminous plant bean primarily based foods and soya bean oil solvent extracted or otherwise together with mechanical device milk powder, cheese, curd, ice-cream, baby foods, proteins foods and different preparation of soybean cereals and lentils together with flour and metric capacity unit, leguminous plant snacks food, soya bean sweets, leguminous plant cookies and chocolates, soya bean sporting food seasoned with fruits and vegetables and soybean beverages and different product and preparations of each kind nature and outline.
To manufacture, produce, process, prepare, obtain sell and deal all told forms of biscuits, bread, cakes, pastries, confectionery, sweets, chocolates, breakfast foods, super molecule foods, deictic product strained baby foods, tea and low, cereal product, wheat and provisions of all types.ANALYSIS OF FINANCIAL STATEMENTPARSONS NUTRITIONALS PRIVATE LTD, BALANCE SHEET AS ON 31st MARCH 2016 AND 2017SL, no. PARTICULAR The Year Ending 31-03-2016 The Year Ending 31-03-2017A SOURCE OF FUND 1) SHAREHOLDER FUNDS Share Capital 900,00,000 1000,00,00Reserves and surplus 426,28,109 928,39,507Money pending allotment for share 630,000 -2) NON-CURRENT LIBILITIES Long-term barrowings 1000,00,000 900,00,000Long-term provisions 900,00,000 800,00,0003) CURRENT LIABILITIES Short-term barrowings 11,00,000 -Bills payable 824,20,000 119,55,000Other current liabilities 530,00,000 487,76,000Short-term provision – 201,00,000TOTAL SOURCES OF FUNDS 4597,78,109 4237,71,507B APPLICATION OF FUNDS 1) FIXED ASSETS Tangible assets 2845,00,000 2734,08,000Intangible assets – -2) LOANS AND ADVANCE Long-term loans and advance 632,00,000 660,19,5073) CURRENT ASSETS Current investment – -Bills receivables 427,47,109 120,70,000Inventories 598,40,000 698,50,000Cash and cash equivalents 691,000 23,74,000Short-term loans and advances 88,00,000 50,000TOTAL APPICATION OF FUND 4597,78,109 4237,71,507PROFIT AND LOSS ACCOUNT THE YEAR ENDING31st MARCH 2016 AND 2017SL, no PARTICULAR The Year Ending 31-03-2016 The Year Ending 31-03-20171. INCOMES Sales of products (Gross) 7064,74,094 8137,70,689Less: Excise duty 54,44,094 65,69,789Sales of product (Net) 7010,30,000 80,72,00,900Other operating revenues 48,60,082 56,48,0797 7058,90,082 8128,49,697Other incomes – -TOTAL INCOME 7058,90,082 8128,49,6972. EXPENDITURE Cost of goods consumed 5888,65,200 6481,62,935Buying of traded goods – -Direct cost 300,07,353 303,07,427Interest and financial expenses 179,29,537 161,36,585Other expenses 144,48,618 145,93,105Depreciation in the year 120,11,265 108,10,138TOTAL EXPENSES 6632,61,973 7200,10,190Profit before tax (PBT) 426,28,109 923,39,507RATIO ANALYSISCASH RATIO:The ratio of a company’s total cash and alternative to its current liabilities.
The ratio is most mostly common used as a measure of company liquidity. It as a result determine if, and have fast the company can refund its short-term debt.Cash ratio = Cash + Market securities Current LiabilitiesThe table shows the cash ration of 2015-16 and 2016-17Year Cash Current liabilities Ratios2015-16 6,91,000 13,65,20,000 0.00512016-17 23,74,000 8,08,31,000 0.02931.
1The graph shows the cash ratio of 2015-16 and 2016-17704850104140Cash Ratio0.0350.030.0250.020.
0150.010.00502015-162016-17Interpretation: The Cash Ratio of a firm measures its ability to meet cash requirements ofthe firm. As per the above figure cash ratios for the year2015-16 is 0.0051 and 2016-17 is 0.
0293 from this it can be inferred that the firm has strong cash position and the capacity to pay its current duty in time as and when they happen due.CURRENT RATIO:The current ratio is a financial ratio that measures whether or not a firm has sufficient resources to pay its debts over the next 12 months. It compares the firm’s current assets to its current liabilities. The current ratio is notice of a firm’s market liquidity and liability to meet creditor’s demands.Current Ratio = Current Assets Current Liabilities1.
2 The table shows the current ratio of 2015-16 and 2016-17Year Current Asset Current Liabilities Ratios2015-16 10,98,22,768.27 3,51,24,452.96 3.1262016-17 7,50,21,206.00 3,15,32,180.71 2.
3791.2The graph shows the cash ratio of 2015-16 and 2016-1736195024765 Current Ratio3.532.521.
510.502015-162016-17Interpretation: The Current Ratio of a firm measures its capacity to meet short runduties. The ideal Current Ratio is 2:1 and is considered to be satisfying. It means that current assets should be twice current liability.
As per the above figure current ratios for both the years are above than 2:1 from this it can be inferred that the firm has strong liquidity position.NET PROFIT RATIO:Net profit; also refer to as the bottom line or net earnings is a measure of the profitability of a venture after accounting for costs. The actual profit made on a business transaction, sale, etc.
, or during a specific period of business activity, after offer all costs from gross receipts.Net profit Ratio= Net Profit × 100Net Sales1.3The table shows the current ratio of 2015-16 and 2016-17Year Net Profit Net Sales Ratios2015-16 1,32,34,625.72 49,59,76,218.77 0.0262016-17 5,51,28,058.
34 49,73,14,516.82 0.1101.
3 The graph shows the cash ratio of 2015-16 and 2016-17575310474345Net Profit Ratio0.12 0.1 0.08 0.06 0.04 0.
02 0 2015-16 2016-17Interpretation: The figures indicated that the Net profit ratio during the year 2016-2017 is. 0.110 Which his less compared to Net Profit Ratio of 0.026 in the year 2015-2016. This showed that net profit ratio has decreased.
DEBT-EQUITY RATIO:Debt equity ratio is a debt ratio used to measure a company’s financial leverage, calculated by divides a company’s total liabilities by its stockholders equity. The debt equity ratio show how much debt a company is using to finance its asset to the amount of value represented in shareholders’ equity.Debt Equity Ratio= Total Debt Total Equity1.4 The table shows the Debt Equity Ratio of 2015-16 and 2016-17Year Long Term Borrowings Share Holders Equity Ratios2015-16 10,00,00,000 9,00,00,000 1.112016-17 9,00,00,000 10,00,00,000 1.
111.4 The graph shows the Debt Equity Ratio of 2014-15 and 2015-1645720036195Debt Equity Ratio1.2 10.
188.8.131.52014-152015-16Interpretation: From the above table and graph it is seen that debt equity is constant from2015-16 to 2016-17 is 1.11. Current debt is maintaining by the company is not favor or good.
The company has to decrease its long term borrowings to reduce the debt of the company.CHAPTER-2CONCEPTUL BACKGROUND AND LITERATURE REVIEWTHEATRICAL BACKGROUNDCOST- MEANINGCost is the price paid for a something. In other word cost is the amounts of resources used for something which must outlast measured in terms of money. The first part of the sentence speaks a cost as the objective or the end product which finally results from a process of costing and the second part as the process itself.CLASSIFICATION OF COSTClassification of cost means grouping of costs, accounting to certain elements so that all the items having features get similar treatment. It may be done under various bases.
Direct cost All those cost which are incurred and can be allocated to the cost objects conveniently are known as direct cost. The cost of raw materials, wages for a machine operators ect.The best examples of direct cost.Indirect cost The cost that are incurred in relation to a number of cost units or processes or departments, which can’t be identified conveniently and allocate to a particular cost unit or cost object or department, is called indirect cost.Fixed cost These costs remains constant irrespectively the volumes of the output within a range of activity for specific period of time. Only the total amount of the cost remains constant. However, when the cost is calculated on per unit basis the cost per unit there decreases within the increases the level of outputs.Variable costThis costs is in direct proportion to the volume of outputs. The total amount of the cost increases or decreases the changes in the level of output. The cost is calculated on per unit basis the cost per unit remains constant unmindful of the level of output.Semi-Variable costThe costs that do not vary with the level of output in direct proportion are called as semi-Variable cost. In this type of cost a portion remains constant or fixed and the other portion varies with level of output, hence this behavior.OVERHEADS The overheads are important to proceed with the working of the business however they can’t be quickly related with the item or administrations being advertised. The premise of capacity overheads are processing plant or assembling overheads, office and organization overheads, offering and circulation overheads, innovative work overheads.CLASSIFICATIONS OF OVERHEADsManufacturing overheadsThe indirect cost incurred for operating or manufacturing or production division of the factory. It includes all the overheads incurred from the stage of procurements of a materials till the finished products is completed.Office and Administrative overheads It is costs that are incurred in the process of general administration. the examples are account office costs, audit fees, bank charges, deprecation of office building directors’ remuneration, postage, stationary, telephone expenses etc.Selling and distribution overheads The name itself indicates are the costs incurred in the process of reaching the ultimate customer. Advertisement, bad debts brokerage, market research, salaries to the sales men, commission to the selling agents, sales office expenses, carriage outwards, insurance on finished stock, packing and shipping, expenses of transport vehicles, warehouse expenses etc.COST SHEETCost sheet is an announcement of cost which demonstrate the different components of the cost of merchandise created as far as prime cost, manufacturing plant cost, cost of generation, cost of products sold, cost of offers and benefit or misfortune. This is normally arranged in general interims, for example, week after week, month to month, quarterly, every year relying upon the prerequisite of the association.PROFOMA OF COST SHEETCost sheet of (product name and code) of ABC Ltd. For the period ending,Particular Amount (Rs) Amount (Rs)Opening stocks of raw material’s XXX (+) : Purchase’s XXX (+) : Carriage inward XXX (+) : Octroi and Customs duty XXX (-) : Closing stocks of raw material’s XXX Raw materials consumed XXXDirect or product wages/direct labor XXX (+) : Outstanding wages, if any XXX Direct/chargeable expenses XXX Prime cost XXX(+) : Workers or factory overheads Indirect materials XX Indirect wages XX Overtime charger XX Fuel and power XX Factory rent XX Factory lighting XX Insurance XX Supervisor XX Staff welfare expenses XX Work expenses XX Deprecation of plant and machinery XX Gas and water XX Drawing office expenses XX Technical director’s fees XX Laboratory expenses XX Internal transport expenses XX XXX(-) : Sale of scrap XXGross factory cost/ Gross works cost XXX(+) : Opening stock of work in progress XXXXX(-) : Closing stock of work in progress XXNet factory cost/ Net working cost XXX(+) : Office & Administration overheads Office salary XX Office rent and rates XX Stationery and printing XX Office expenses XX Depreciation of office building XX Depreciation of office furniture XX Office lighting XX Establishment charges XX Director’s fees XX Director’s travelling expenses XX Legal charges XX Audit fees XX XXXCost of productions XXX(+) : Opening stock of finishing goods XXXXX(-) : Closing stock of finished goods XXCost of Goods Sold XXX(+) : Selling & Distribution overheads Advertising XX Showroom expenses XX Salesmen salary XX Carriage outwards XX Salesmen commission XX Packing expenses XX Bad debts XX Counting house salaries XX Delivery van expenses XX Travel expenses XX Warehouses expenses XX Sales managers salary XX Sales directors fees XX Sales office expenses XX Depreciation of delivery van XX Repairs of delivery van XX Expenses of sales branches XX XXXTotal cost or cost of sale XXXProfit XXXSales revenue XXXLITERATURE REVIEWPhill Carroll (Carroll, 1953) in his books on “How to Control Production Costs” stresses the need for improved cost analyses and controlled by business to secures reasonable profit expectations. Great emphasis is placed upon the need for more detailed cost accounting, depicting actual conditions so that good judgment can be applied to control and reduce costs. The use of average figures for overhead is glared upon because the individual effects of component factors might be hidden if they tended to counteract each other. Charles T. Horngren, the Edmund W. Littlefield (Horngren, Datar, and Rajan, 2014) Professor of Accounting, Emeritus, at the Stanford Graduate School of Business, credited with innovative cutting edge cost administration hones referred to everybody as Chuck. His course reading of Cost Accounting: It is only one of a few of his books that have molded the instruction of ages of bookkeeping understudies of the entire world. (Spence, January, 1984), in his investigation in view of a meeting continuing (Stiglitz and Mathewson) the motivation behind diminishing their costs associations are contending after some time to extending their assets. In such a significant number of cases it is discovered that, they appear as growing new items that get showcase and whatever clients require more financial. In this manner, item improvement can have a definitive impact on coordinate cost lessening. Truth be told, on the off chance that one thinks about the item as the administrations it conveys to the client, the factor of deciding the estimation of the cost for innovative work is productivity or income. Dr. Pramod (Kumar, 1991) distributed a Book in 1991, “Examination of Financial proclamations of Indian ventures.” The investigation secured the 17 private, 5 state claimed and 1 focal open segment organizations. He contemplated the examination of exercises, gainfulness appraisal, return on capital speculation, investigation of monetary structure, investigation of settled resources and working capital. In his exploration he talks about a few difficulties looked by concrete ventures and recommended conceivable arrangements. He likewise recommended for the change of benefit and procedures of cost control. Sayed H. Stoman (1999) watched that “a Project Manager has to know, including administration nuts and bolts, openness and arranging, staffing and work criteria, booking and points of reference, administrative help, correspondence and ceaseless change for the fruitful Cost Management Processes”. Youthful Hoonk wak (2002), The venture cost administration incorporates scope arranging, scope definition, asset arranging, cost assessing and cost planning and arranging is the way toward building up a composed and proclamation as the reason for development venture choices including cost administration. (Boardman, Greenberg, Vining, and Weimer, 1996) recognizes nine unique advances that are essential for money saving advantage analysis. The equivocalness including appraisals of expenses and advantages implied that money saving advantage examination was probably going to illuminate choices as opposed to offering a basic leadership run the show. The best methodology, under this investigation, is distinguished by the capacity to accomplish a normal objective at the base consumption. Another diagnostic thought critical to money saving advantage examination is to recognize the inert physical effects of option approaches, and determine the estimation pointer that will be utilized evaluate these effects. Actually, these anticipated consequences for the costing can be assessed constantly, finished the life time of the item. John Christian, Gillin, Amar Pandeya (Christian, Gillin, and Pandeya, 1997) discusses the issues looked by office supervisors in any association “Quantitative information on the recorded working and upkeep expenses of these offices, alongside learning of the components influencing the expenses were inspired through different sources. Cost expectation models created, utilizing neural systems, relapse investigations, and arbitrary deviation location strategies. The framework made might be utilized to help and inform on specific viewpoints concerning office administration, for example, the estimation of working and support costs, and the improvement of preventive and general upkeep gets ready for offices like those examined”. Demos C. (Angelides 1999) inferred that “great Technical Practices independent from anyone else are not adequate to create and convey great items/Services rapidly and effortlessly. They should be incorporated through great task administration to accomplish better item”.Roland T. Rust, Christine Moorman and Peter R. (Roland T. Rust, Oct 2002), states that budgetary advantages as far as benefit and money streams might be gotten from income development, cost diminishment or both at the same time. the creators address the issue of which quality productivity accentuation (income extension, cost lessening or both) is best. Albeit no organization can disregard either income development or cost lessening, the exact outcomes recommend that organizations that embrace basically an income extension perform superior to firms that endeavor to stress cost diminishment and superior to firms that attempt to accentuate both income development and cost lessening at the same time diminish underway expenses or increment in deals. Low quality income might be from manufactured sources like swelling or forceful bookkeeping and cost control is considered as a technique to accomplish focused on benefit yet not a determinant of profit qualityDr. Sanjay (Bhayani, 2003) distributed a book in 2003; “Pragmatic budgetary articulation analysis”.He examined the investigation of exercises, gainfulness appraisal, return on capital speculation, examination of money related structure, examination of settled resources and working capital. In his exploration he talks about a few difficulties looked by bond ventures and recommended conceivable arrangements. He additionally proposed for the change of benefit and methods of cost control. Compton and Brinker (Compton, J and Brinker, and Thomas M, 2005) specified that each cost is extraordinary, and just some ought to be assessed for basic leadership purposes Different specialists recognized various types of expenses. Recognized cost control incorporates coordinate costs, outsider costs, distributable costs, backhanded expenses and related expenses. Recognized peripheral expenses and sunk expenses. Cost of creation per unit is the cost related with generation, partitioned by the quantity of units delivered (Webner, 1911) gave that material, work and costs are the three basic components of creation costs. Sachdeva and Umesh Sharma (2006), in their examination, presumed that the materials administration which incorporates acquisition, stock shop manufacture and field overhauling needs exceptional consideration for cost decrease. Preetha G.Raman and Virendra kr.Paul (2006). Cost administration forms are coordinated projects where a few procedures like records, cost assess, back and so on., are overseen from a typical database.Suresh, Samuel and Vanniarajan (Suresh, Samuel, and Vanniarajan, Jan-June 2007) in their investigation of Cost Analysis in Cooperative Sugar Mills in Tamil Nadu examined that without control over the sugar stick price tag and deal value, sugar plants were to center around the cost acquired amid the season of generation and the proficient recuperation of sugar to diminish the misfortunes. Viable cost control strategies and enhanced recuperation of sugar will build the productivity and enhance execution of the sugar plants. So as to enhance the recuperation of sugar and to control the costs this investigation makes an endeavor to, From the examination it is built up that execution of co-agent sugar processes in Tamil Nadu is exceptionally poor in contrast with global sugar businesses. This is because of sugar factories don’t have successful control over the cost brought about amid the creation and low recuperation of sugar from the sugarcane smashed. Stefania-Eliza and Florin (Stefania, Bana, and Sgardea, 2009) the considered that the data with respect to the generation cost is utilized as a part of merchandise assessment and benefit development. Cost is the cost of make familiar an item with the market, which incorporates the cost of all exploration, advancement, generation, testing, promote, publicizing and circulation of the new item. As indicated by the above hypothesis, this exploration will give the cost structure, connecting the cases picked. Jinkens and Yallapragada (Jinkens and Yallapragada, 2010), contributed in field of cost bookkeeping, they found that new ways to deal with cost bookkeeping, for example, the Activity Based Costing (ABC), recommends that administration bookkeepers ought to receive important and dynamic changes in their elements of giving data to supervisors to empower them to accomplish business execution. Administration bookkeeping hones with fruitful practices from different nations. They additionally understand that the conventional strategies for overhead cost distribution to items isn’t precise. cost classes are the few sorts of costs that ought to be considered when a firm is building an product or giving administrations. They clarified that cost classifications can be partitioned by various circumstances, for instance, settled expenses and variable expenses. Barbole and Yuvraj (BARBOLE A.N., June 2013) in their investigation of “Effect of cost control and cost diminishment methods on assembling part” talked that, they need the costs to fall in this manner it is important for organizations how to deal with its item/benefit Cost, quality, and execution. The investors are likewise requesting a required rate of profit for their venture with the organization. Along these lines, cost has turned into a remaining. cost administration must be a progressing nonstop change customized. They saw in assembling unit, where its fundamental cost component is the Material Cost. Assembling organizations are favoring systems like Value Engineering, Quality Control, Budgetary Control, with the end goal of Cost Reduction. This method satisfies the goal of Company i.e. ‘Minimal effort Manufacturer’. Dr. Atul (Bansal, 2014) contemplated that banks can embrace the viable, useful and focused methodologies to make due in the cutting edge keeping money condition. Money saving advantage examination is a standard instrument for deciding the effectiveness of arranged tasks. Nonetheless, one of the real troubles in chance moderation ventures is that advantages are by nature dubious. CHAPTER 3RESEARCH DESIGNMEANING OF RESEARCH DESIGNIt is the programmed that guide the investigators in the process of collections analysis & interpretation of data. It acts as a blue print to the researcher during the course of his research study. It describes the procedures involved in carrying out a given research task.A brief description of the systematic procedures followed in conducting this study is presented under the following headings.Statement of the problem.Needs for the study.Objectives of the study. Scope of the study.Research methodology. Hypotheses.Limitation of the study.Chapter scheme.STATEMENT OF THE PROBLEM Each association which attempted assembling takes after an item costing. Item costing is essential as it assesses the cost of different items produced and furthermore to have an appropriate control over the stock. PARSON NUTRITIONALS (P) LTD readies a cost sheet for the different items it produces like wheat flour, sugar, glucose, drain powder, salt, and so forth. It will be valuable to decrease the cost on specific things which would diminish cost and increment the benefit. Item costing is deficient and won’t give a legitimate direction with respect to different cost focuses and cost acquired for singular items consequently another cost design has utilized to check the different expenses brought about on items and furthermore the cost caused in different office. NEED FOR THE STUDY Item costing is bookkeeping planned to serve administration in an operational setting as opposed to quantify corporate execution all things considered, despite the fact that, obviously, any sort of cost bookkeeping, including item costing, adds to general outcomes. Item costing engaged with a domain of large scale manufacturing in the second 50% of the 20th century as permanent administrative considered was centered on improving the item work. Customary budgetary bookkeeping approaches have been and keep on being founded on estimations of genuinely unpleasant granularity. OBJECTVES OF THE STUDY Costing is an imperative viewpoint is each item/benefit fabricating concern. An investigation regarding this matter would be finished with the accompanying target. To study the cost structure of PARSON NUTRITIONALS (P) LTD, To identify the overall revenue of PARSON NUTRITIONALS (P) LTD, with the help of the cost sheet. To study, how PARSON NUTRITIONALS (P) LTD decide the cost of its product through cost sheet investigation. SCOPE OF THE STUDY The examination is stretched out to the records branch of PARSON NUTRITIONALS (P) LTD, the information for the planning of cost sheet has been gathered for the monetary year 2017-18, the greater part of the information has been gathered for optional sources. RESEARCH METHODOLOGY The examination is led at PARSON NUTRITIONALS (P) LTD, Harohalli modern zone, Harohalli, Ramanagara-562112 over a time of 10 weeks LIMITATIONS OF STUDY • The depends on the data gave by organization authorities and is liable to predisposition. •The primary premise of the examination is the optional information gave by the organization. • In depth of cost sheet and process could not be done to time constraints. CHAPTER -4DATA ANALYSIS ESTIMATION OF COST SHEET AT PARSONS NUTRITIONAL PVT LTD,Particular Cost per unit Quantity manufactured 1 1,00,000Quantity sold 1 1,00,000 (?) DIRECT COST Raw materials consumed Opening stocks of raw material’s 0 Purchases of raw material’s 5.802 (-) closing stock of raw material’s 0 Material’s consumed 5.802 Direct labour/wages 0.125 Direct cost/expenses 0.2416 PRIME COST 6.1686 INDIRECT COST Factory/works overheads Indirect labour 0.124 Depreciation on machinery 0.685 Works overheads 0.05302 Cost of maintenance 0.0587 Other factory expenses 0.0272 Supervisors salary 0.0395 Power and fuel 0.5786 Total overheads 1.56602 FACTORY COST/WORKS COST 7.73462 Office and administrative overheads Depreciation on office [email protected]% 0.0271 Office rent 0.0575 Salary to staff 0.087 Office and general expenses 0.0254 Telephone expenses 0.0218 Electricity and lightings 0.03124 Printing and stationary 0.00284 Total office and administrative overheads 0.25288 COST OF GOODS SOLD 7.9875 Selling and Administrative overheads Sales commission 0.706 Salary of salesman 0.1 Carriage outward 0.12768 Sales expenses 0.058 Total selling and Administrative overheads 0.99168 COST OF SALES 8.97918 PROFITS 1.02082 SALES 10 Raw materials cost Wheat Flour 3.657 Sugar 3.507 Water 0.872 Milk powder 0.6879 Salt 0.4681 Raw materials per unit 9.192 Cost sheet analysisDirect costDirect material:To manufacture 1 unit of bread the following RAW MATERIAL’S are requires.Wheat FlourSugarSaltWaterMilk powderDirect labor / wages:Direct labor/wages amount to Rs. 0.125 per unit which is approaching 2.009% of the PRIME COST. This percentage is low because a good amount of work is automated as a result of which human resources are redirect to more productive areas such as SALES and MARKET.Direct cost/expenses:Direct cost includes cost incurred in brining the raw materials into the factory which is carriage inward. It also includes the amount paid loading unloading charges and other petty expenses.Indirect costFactory overheads:The factory overheads include labor, depreciation on machinery, works overheads, cost of maintenance, other factory expenses, supervisor’s salary and power and fuel.Indirect labor: The value of indirect labor is Rs.0.124 per unit. This value includes sweeping charges, support staffs ect..Depreciation on machinery: the depreciation is calculated on the basis of WDV calculated at 10% p.a. this value amount to around 43.8% of the FACTORY OVERHEADS. Power: per unit and fuel consumption is Rs. 0.5786Other factory expenses: other factory expenses include maintenance of factory and other miscellaneous expenses.Office and administration overheads:Office and administration overheads include depreciation on office furniture at 7%, office rent, salary to staff, office and general expenses, postage and telegrams, telephone expenses, electricity and lightingsSalary to staff: the salary paid to staffs comes up to on Rs. 0.087 Per unit cost.Office and general expenses: this includes of recreations (tea and snacks), postage and telegrams and other small expenses.Printing and stationary: this involves of photocopy charges, printouts and other stationary items.Telephone expenses: it is calls made by the staff members.Electricity and lighting: it involves of office lighting and air conditioning expenses. Sales and distribution overheads:Selling and distribution cost includes sales commission, discount allowed, salary of salesmen, carriage outward and sales expensesSales commission: as a part of motivated for sales people, they are given commission of 5% of the total sales done by them.Discount allowed: to pull whole sellers to buy the product are offered a discount of 5% on the selling price.Salary of salesmen: the average salary paid to the sales people is around rs. 0.1of the total per unit cost of the product.Carriage outward: to carry the finished goods to the whole sellers, the transportation charge per unit/product is set as Rs. 0.12768.Sales expenses: the includes expenses incurred on advertisements and promotional expenses such as newspaper advertisements, hoardings, TV commercials ect.Profit:The profit occur out of selling per unit of the product is 11.60% of the total per unit cost price. Direct labor/wages and indirect labor/wagesTable no: 4.1 Table showing the total wages of 5yearsYears Direct labor/wages Indirect labor/wages Total labor/wages2013-14 0.114 0.110 0.2242014-15 0.109 0.104 0.4372015-16 0.204 0.200 0.4042016-17 0.120 0.119 0.2392017-18 0.125 0.124 0.249Analysis:From the above table analyze that in the year 2014-15 show the higher wages of the company to meet its total wages when compared to other financial years i.e 0.437. The total wages of the year 2017-18 is 0.249Chart no: 4.1 Chart showing the total wages of 5yearsInterpretation:From the above chart interpret that in the year 2014-15 shows higher wages of the company to meet its total wages when compared to other financial year i.e 0.437. The total wage of the year 2017-18 is 0.249Direct expenses and indirect expensesTable no: 4.2 Table showing the total expenses of 5 yearsYears Direct expenses Indirect expenses Total expenses2013-14 0.2862 0.0427 0.32892014-15 0.2685 0.0362 0.30472015-16 0.2018 0.0268 0.22862016-17 0.2576 0.0246 0.28222017-18 0.2416 0.0272 0.2688Analysis:From the above table analyze that in the year 2013-14 show the higher expenses of the company to meet its total expenses when compared to other financial year’s i.e 0.3.289. The total expenses of the year 2017-18 is 0.2688Chart no: 4.2Chart showing the total expenses of 5 yearsInterpretation: From the above chart interpret that in the year 2013-14 shows higher wages of the company to meet its total wages when compared to other financial year i.e 0.3289. The total wage of the year 2017-18 is 0.2688.Direct coat and indirect costTable no: 4.3 Table showing the total cost of 5 yearsYears Direct cost Indirect cost Total cost2013-14 7.5362 8.6279 16.16412014-15 6.6348 7.9541 14.58892015-16 5.4278 6.7351 12.16292016-17 7.2642 8.6142 15.87842017-18 6.1686 7.73462 13.9032Analysis:From the above table analyze that in the year 2014-15 show the higher cost of the company to meet its total cost when compared to other financial year’s i.e 14.5889. The total cost of the year 2017-18 is 13.9032.Chart no: 4.3 Chart showing the total cost of 5 yearsInterpretation:From the above chart interpret that in the year 2016-17 shows higher wages of the company to meet its total wages when compared to other financial year i.e 14.5889. The total wage of the year 2017-18 is 13.9032Factory/ work cost and office administration Table no: 4.4 Table showing the cost of goods sold of 5 yearsYears Work cost Office cost Cost of goods sold2013-14 1.5546 0.3642 1.91882014-15 1.3821 0.2061 1.58822015-16 1.6865 0.4384 2.12492016-17 1.2608 0.3549 1.61572017-18 1.5660 0.2529 1.8189Analysis:From the above table analyze that in the year 2015-16 show the higher cost of goods sold of the company to meet its cost of goods sold when compared to other financial year’s i.e 2.1249. The total expenses of the year 2017-18 is 1.8189.Chart no: 4.4 Chart showing the cost of goods sold of 5 yearsInterpretation: From the above chart interpret that in the year 2015-16 shows higher cost of goods sold of the company to meet its cost of goods sold when compared to other financial year i.e 2.1249. The cost of goods sold of the year 2017-18 is 1.8189.Cost of goods sold and selling and administration costTable no: 4.5 Table showing the cost of sales of 5 yearsYears Cost of goods sold Selling cost Cost of sales2013-14 6.5126 0.82081 7.333412014-15 9.3152 0.69045 10.005652015-16 5.6321 0.96281 6.594912016-17 9.5314 0.76451 10.295912017-18 7.9875 0.99168 8.97918Analysis:From the above table analyze that in the year 2016-17 show the higher cost of sales of the company to meet its profit when compared to other financial years i.e 10.29591. The profit of the year 2017-18 is 8.97918.Chart no: 4.5 Table showing the cost of sales of 5 yearsInterpretation:From the above chart interpret that in the year 2016-17 shows higher cost of sales of the company to meet its cost of sales when compared to other financial year i.e. 10.29591. The cost of sales of the year 2017-18 is 8.97918 .Sales and cost of sales revenueTable no: 4.6 Table showing the profit of 5 yearsYears Cost of sales Sales revenue Profit2013-14 6.51268 9 2.487322014-15 9.31524 12 2.684762015-16 5.63215 8 2.367852016-17 9.53149 11 1.468512017-18 8.97918 10 1.02082Analysis:From the above table analyze that in the year 2014-15 show the higher profit of the company to meet its profit when compared to other financial years i.e 2.68476. The profit of the year 2017-18 is 1.02082.Chart no: 4.6 Chart showing the profit of 5 yearsInterpretation:From the above chart interpret that in the year 2014-15 shows higher wages of the company to meet its total wages when compared to other financial year i.e2.68476. The total wage of the year 2017-18 is 1.202082.CHAPTER-5SUMMARY OF FINDINGS, CONCLUSIONS AND SUGGESTIONSFINDINGS:Direct labour or Wages amount to ? 0.125 per unit is on 2.01% of the prime cost.Direct cost consist cost incurred in bring the raw materials into the factory which is carriage inward.The value of indirect labour is ? 0.123 per unit. This value includes sweeping charges, support staff etc.The depreciation is calculated on the basic of written down value calculated at 10% p.a. the amount to on 42.7% of the factory overheads Office and administration overheads involves depreciation on office furniture at 8% office rent. Salary to staff, office and general expenses, postage and telegrams, telephones expenses, electricity and lighting.As a part of motivation for sales people, they as give commission of 5% of the total sales have proper by them.The average salary paid to sales people is on ? 0.2 of the total per unit cost of the product. CONCLUSION:An attempt was made with an idea of studying the cost sheet analysis a of Parsons Nutritional private ltd. For this purpose, the suggestion offered by me may be considered by the company for the further improvement of financial performanceThe company’s overall capacity utilization increased only by 4.45% while the profits before tax increased by 117% from the year 2016 and the overall capacity utilization has been to the extent of about 68% and hence there is scope for increasing the same which will increase the profits.The company’s profit for the year 2017 increased mainly on account of getting a better price for the products for each type of packing which yielded a higher PV ratio to the extent of 13% from 12% in the previous year.The company is doing well in its production activitiesSUGGESTIONSThe amount of direct as well as indirect labour should be decreased from ? 0.123 unit to Rs. 0.2 in order to decrease the per unit cost.The average salary paid to the sales people should be maximized in order to order to motivate the sales personnel in order to maximize the sales in the market.As a part of motivation for sales people be given a commission of 8% instead of 5% of the total sales proper by them in order to maximize sales and production and decreasing cost per unit.